Advance Directives: A Special Insurance Policy That Everybody Needs

What is insurance? A thing providing protection against a possible eventuality.

Given the advances in medical technology, there are many possible circumstances in which my body may be kept alive even if my mind may have ceased to function. This could result from accident or disease. It could occur in the near or distant future. Under these circumstances, I have very specific desires of things that I want to be done and others that I want to stop or prevent from occurring. Can I take out an insurance policy that will protect me against institutions or people taking actions that are against my wishes? Yes, it's called an Advance Directive.

This form of insurance can be acquired without an agent or attorney. To get this coverage you must invest some time and energy to get your state's forms and fill them out. This is usually a two-part form with the first section designating who can make health care decisions for you in the event that you are not capable. This is usually called a Medical Power of Attorney designation. The second part, sometimes referred to as a living will, is where you are able to give physicians and family specific instructions regarding your care. The forms can be downloaded on-line from several different sources or can be picked up from any hospital in your area.

The mechanics of the process can be a little difficult and uncomfortable. This small discomfort allows for procrastination to jump in and convince you that this is a good idea and you really should do it someday, but not today. Maybe you'll do it next week or next month. One way to help you get over the hurdle of procrastination is to really look at some of the many benefits that you get from completing this task.

Three benefits of Advance Directives:

• Peace of mind from knowing that you have insurance in place.
• A huge gift will be given to your family and loved ones. In the event that it is needed, they will be greatly helped and assured that you are guiding their decisions.
• Protection of your estate and financial assets. Medical institutions are allowed to utilize their technology to prolong life even when the outcome may be futile. This process can drain your financial resources and possibly impoverish your family.

When you discipline yourself to create an advance directive, set aside adequate time to consider specific details. The more specific you make your wishes, the better the quality of your policy. After completing the process you will enjoy a deep sense of satisfaction. So set a deadline to help you guide the process and make it happen.

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How Do I Set Up an LLC Without a Lawyer?

Limited Liability Companies (LLC) are business entities that got their start in 1977 and are considered to fit somewhere between sole proprietors/partnerships, and fully incorporated companies. Existing to fill the gap between corporations and sole proprietors LLCs can help to segment personal and business assets and liabilities while at the same time maintaining a simplified tax structure. An LLC is not corporations but is a company structure to operate like a corporation.

Liability

An LLC is in itself its own legal entity so long as it is treated as one. The LLC can assume obligations of debt. In other words the LLC, not the members, hold a loan and the liabilities that go along with it. If however the members of an LLC use the entity as their personal bank or for personal matters it is possible that the LLC will not be recognized as a separate entity if a lawsuit is filed.

Taxes

As far as taxes go LLCs are considered by the IRS as pass-through entities. This means income passes through the business and goes straight to the LLC members just as they would with a sole proprietorship or partnership. These profits or losses are filed on each individual's tax return. A caveat to this is that LLCs can be taxed as a corporation if the members elect to do so. So, if treated appropriately an LLC can shield its members from the liabilities of a corporation without assuming the tax overhead a true incorporation must maintain.

How to File

If you are thinking about forming an LLC for your business, spend the next 20 minutes educating yourself on the difference between Sole proprietorships, LLCs, and S corporations. My guess is that for most people starting out as a sole proprietorship will be sufficient for current needs and much cheaper than filing for an LLC.

If you have done your homework and have decided that an LLC is the way to go, what next? The steps to filing an LLC are not complex and although requirements vary from state to state, setting up an LLC is a simple process that can usually be done in an hour.

1. Articles of Organization
   
   The first step is to contact your secretary of state and obtain the required form for filing a LLC. In some cases this will be a simple fill in the blank form. The state of Washington for example has an online application. The processes guides you through establishing a legal name, completing the certificate of formation, establishing the registered agent, defining the members, and guides you through the initial annual report. The fee for WA is roughly $200.00, additional costs may apply depending on how you file. Google your secretary of state to find out more of the specifics.


2. Registered Agent
   
   As you fill out your articles of organization you will be required to define the registered agent for the LLC. In most cases this will be you. The registered agent is the person or business that is designated to receive important documents on behalf of the LLC. The most appropriate individual for this is generally the one spear heading the business.


3. Operating Agreement
   
   The operating agreement is the internal agreement between the members of the LLC. It is not required to form the LLC but it should be drafted to state the rights and responsibilities of the members. The operating agreement should contain but is not limited to the following;
   
   
   • Capital Contributions. How are the members expected to make capital contributions if the business needs additional capital?
   • Management Decisions.When the members are faced with important management decisions, does each get one vote, or do they vote according to their percentage interests in the LLC? Majority shareholders may feel they deserve a larger say.
   • Financial Withdraws. How do owners go about draws from the profits of the business?
   • Buy Out/Cash out. How do members leave the LLC? Will they receive an immediate payout of their capital contributions?
   • Compensation. If a member does leave how much should they be paid?
   • Share. While there are not actual shares within a LLC it should be defined how or if a departing owner is allowed to sell an interest to an outsider?

Publish a Notice

Some states require a notice of intent to be published. This can be as simple as running a classified ad in your local paper. Specifics on this will vary and your secretary of state can provide you with the steps required.

Licensing

The last bit to think about is obtaining other appropriate insurance, permits, and licenses for your new LLC. Each industry had its own unique set of requirements so be mindful of this once your business is established.

Conclusion

LLCs are considered by many to be a great way to establish a small business. There is little required to get one started and protection they provide could be priceless. That said an LLC may not be needed for everyone. Only you know the entity type most appropriate for your business.

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Power of Attorney

Rene at By the People in Fairfield CA talks about just some of the reasons for a need for a Power of Attorney. These documents can be really important aids in helping loved ones.

For any questions about the types of Power of Attorney, and what may be beneficial for your individual needs, call Rene or Tammy at 707-428-9871 and visit the website at http://www.bythepeopleca.com

Partnerships, LLCs, Corporations What’s Best for Your Business

Don't know if you should choose an LLC or a Corporation? Learn some tips here on what's best for you business.

4 Reasons Why You Might Need a Trust

Entrepreneur Network partner Mark Kohler discusses the importance of setting up a trust.

Happy Thanksgiving!

Give thanks for a little, and you will find a lot. 

-Hausa Proverb

Advance Directives: A Need for All Ages

Emergencies or a health care crisis can happen at any time, and the time to think about how you would want your medical care is now.

Living Trust and Wills - By the People

Living Trust or a will? Rene talks about some of the differences and what sets one apart from the other to help you make the best decision for your needs. Call Rene or Tammy at 707-428-9871 with any questions you may have, and see their website at http://www.bythepeopleca.com

California Estate Planning Basics

California estate planning is essential for residents of the Golden State. Basic strategies should encompass executing a last will and testament; establishing a healthcare proxy; and designating power of attorney rights. Dependent on estate value, establishing a trust can further protect inheritance assets.

California estate planning strategies must comply with state and federal laws. California has some of the most complex probate laws in the country, so it is best to work with a qualified estate planner or probate attorney.

Probate is used within the US to settle estates that are not protected by a trust. The process varies depending on if decedents engaged in estate planning procedures prior to death. When individuals die without leaving a Will, the estate settlement process requires additional time and exposes the estate to a higher level of creditor claims or the potential for heirs to contest the Will.

The last will and testament provides directive as to how estate assets should be distributed. It is also used to appoint a personal representative charged with duties required to complete estate settlement process. Without these written directives, the estate must be settled according to California probate code.

The timeliness of estate settlement depends on various factors. One of the most prevalent is estate value. In the state of California, estates appraised with values of less than $100,000 are usually exempt from probate if a legal Will has been executed and filed through court.

The estate must undergo a 40-day waiting period to avoid probate. Afterward, the personal representative must present a legal affidavit to the court before distributing inheritance gifts to designated beneficiaries.

When decedents do not leave a Will the estate is required to undergo a probate proceeding to determine rightful heirs. This is particularly important to understand if California residents do not want to bequeath gifts to direct lineage relatives. In order to disinherit relatives the Will must include a disinheritance clause which states the reason why heirs are not entitled to estate assets.

The purpose of including the disinheritance statement is to minimize risks of heirs contesting the Will. It is not uncommon for disinherited relatives to claim the decedent was under the influence of another person or was of unsound mind.

Contesting a Will can freeze assets in probate for months on end. This act can force personal representatives to sell inheritance assets to cover legal expenses. Defense fees can easily bankrupt small estates and leave nothing for designated beneficiaries.

In addition to protecting assets, California estate planning is the most effective strategy for establishing healthcare proxies. This document allows individuals to document the type of medical treatment they do or do not want to have if they are incapable of making decisions due to illness or injury. Healthcare proxies include 'Do Not Resuscitate' (DNR) orders, as well as providing directives regarding life support and delivery of nutritional intravenous feedings.

Estate planning is also used to grant Power of Attorney rights. POA is an important decision that should not be taken lightly. The person granted with POA powers should be someone who can be trusted to make smart financial decisions, and make difficult decisions on your behalf if you become incapacitated.

Establishing California estate planning strategies is one of the best gifts to leave loved ones. Without written directives, decisions surrounding your estate will be left to the courts and chances are they won't be what you would have wanted. Additionally, putting affairs in order can reduce family discord and allow for efficient distribution of inheritance gifts.

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Advance Health Directive: The Living Will and The Power of Attorney

A living will, also called will to live, is one type of advanced health care system, or advanced health care principle. It often goes along with a specific type of power of attorney. These are legal tools that are usually witnessed or notarized.

A living will usually covers specific directions as to the course of treatment that is to be taken by caregivers, or, in particular, in some cases denying treatment and sometimes also food and water, should the patient be unable to give conscious consent ("individual health care instruction") due to illness.

A power of attorney for health care, appoints an individual (a proxy) to give health care decisions should the patient be unable to do so.

Refusal of treatment forms, the name suggests, the term "will to live", as opposed to the other terms, tends to point out the wish to live as long as possible rather than refusing treatment in the case of serious conditions.

In the Netherlands, patients and likely patients can identify the circumstances under which they would want euthanasia for themselves. They do this by providing a written order. This helps to ascertain the preexisting expressed wish of the patient even if the patient is no longer able to exchange a few words. However, it is only one of the factors that is taken into account.

In Switzerland, there are several associations which take care of registering patient declarations, forms which are signed by the patients declaring that in case of unending loss of judgment (e.g., inability to communicate or severe brain damage) all means of prolonged life shall be stopped. Family members and groups, also keep alternatives which entitle its holder to enforce such patient decrees. Establishing such decrees is pretty straightforward.

In the United States, most states recognize living wills or the label of a health care surrogate. However, a "report card" issued by the Robert Wood Johnson Foundation in 2002 concluded that only seven states deserved an "A" for meeting the standards of the model Uniform Rights of the Terminally Ill Act. Surveys show that one-third of Americans say they've had to make decisions about end-of-life care for a loved one.

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